Under HOTMA, some items are excluded from income, some are excluded from assets, and some are excluded from both income and assets. Other items are not excluded at all. Keeping track of the difference is important.
Note: Questions 1-5 were in last month's post.
6. ABLE accounts with employer contributions (separate from wages) into the account
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | See reference HUD Notice H-2019-06 and 5.603(b) Net family assets (3)(iv). Employer contributions separate from wages are excluded from income by HUD Notice and are also excluded from net family assets by HOTMA HUD regulation.
7. IRS-recognized retirement accounts with periodic withdrawals
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | See references 24 CFR 5.609(b)(26) and 5.603(b) Net family assets (3)(iii). Both the asset and any income earned are excluded from the account. However, the periodic withdrawals are not excluded from income.
8. Revocable trust under the control of the family
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | Revocable trusts under the control of a family are assets, and income earned by the trust is counted as income to the family as it is earned. See 24 CFR 5.609(b)(2)(ii).
9. Food stamps
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | Food stamps are excluded as income by the food stamp law. HUD has also clarified that balances associated with food stamps are excluded as assets. See reference HUD Notice Federal Register FR–6410–N–01 Federally Mandated Exclusions From Income—Updated Listing (1).
10. PASS account (Plan to Attain Self-Sufficiency SSI account)
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | Income from PASS accounts is excluded, but there is no asset exclusion listed in the HOTMA regulation for PASS accounts. See 24 CFR 5.609(b)(12)(i).
Under HOTMA, some items are excluded from income, some are excluded from assets, and some are excluded from both income and assets. Other items are not excluded at all. Keeping track of the difference is important.
1. Federal tax refunds or refundable credits
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | See reference 24 CFR 5.609(b)(24)(iii) and (iv) and 5.603(b) Net family assets (3)(xi). These are excluded as nonrecurring income and are also excluded from net family assets.
2. State tax refunds or refundable credits
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | See reference 24 CFR 5.609(b)(24)(iii), where these are excluded as nonrecurring income. However, they are not excluded from net family assets, unlike federal refunds/credits at 5.603(b) Net family assets (3)(xi).
3. TANF
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | Temporary Assistance for Needy Families (TANF) is not listed as excluded anywhere in HUD regulations.
4. IRS-recognized retirement accounts without periodic withdrawals
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | See references 24 CFR 5.609(b)(26) and 5.603(b) Net family assets (3)(iii). Both the asset and any income earned is excluded. Only periodic withdrawals are income.
5. Irrevocable trust with income distributions to the family
A. Income exclusion only
B. Asset exclusion only
C. Both income and an asset exclusion
D. Neither an income nor an asset exclusion
Details | Irrevocable trusts are not assets, as they are not accessible to the family. See 24 CFR 5.603(b) Net family assets (4) and HOTMA HUD Notice H 2023-10 F.4.d.i. Income distributions paid to the family are income to the family, except when the distributions are used to pay the costs of health and medical care expenses for a minor. See 24 CFR 5.609(b)(2)(i)(B).
PHAs manage the public housing and Housing Choice Voucher (HCV) programs in many areas. PHA programs also interact with other housing programs. Take this quick to see if you’ve got some of the details down.
1. As of 2025, PHA determination of income for a family receiving an HCV can be used for both LIHTC and HOME programs.
True
False
Details | This has always been allowed by the LIHTC program. HOME introduced this in 2025. See 24 CFR 92.203(a)(1).
2. The subsidy payments that a PHA provides through an HCV must be included when determining rent compliance for which programs?
A. LIHTC
B. HOME
C. NHTF
D. Section 8 PBRA
Details | Tenant-based subsidy is not included for the LIHTC or HOME programs (starting with HOME 2025). It is still included for the NHTF program. See 24 CFR 93.302(b).
3. The LIHTC, but not the HOME program, allows owners to use PHA utility allowance estimates for program units.
True
False
Details | This was true when the 2013 HOME Final Rule was published, but was reversed with the 2025 Rule revision.
4. Per HOTMA rules, when using the determination of income to determine eligibility for a family with an HCV, which portion of the determination may an owner/agent use:
A. The part that establishes periodic income only.
B. The part that establishes income from assets only.
C. The part after adjusted income is determined.
D. The total annual income before any adjustments.
Details | The complete income must be used before adjustments. An owner/agent cannot pick and choose parts of the determination with other verifications. See HOTMA Notice 2023-10 J.4
5. When setting rents that they will pay for an HCV for tenants at an LIHTC or HOME property, a PHA should never pay more than other LIHTC or HOME tenants at the property who do not have an HCV pay for rent.
True
False
Details | Per LIHTC, HOME, and HCV regulations, the owner/agent may request and be granted the full rent standard allowable to non-LIHTC HOME units in the area. For the HCV rule, see 24 CFR §982.507(c).
6. For most programs, the use of a PHA determination of income is an option. Which program requires the use of the PHA determination for an HCV user?
A. LIHTC
B. HOME
C. HUD Section 8 PBRA
D. NHTF
Details | See 24 CFR 93.151(a)(2) and (3).
HOME 2025 didn’t just touch rents (as tested in the last quiz) — it updated inspections, income determinations, and recordkeeping requirements. Test yourself on the changes here.
1. Which inspection protocol now applies to HOME-assisted rental housing?
A. HQS (Housing Quality Standards)
B. UPCS (Uniform Physical Condition Standards)
C. NSPIRE (National Standards for the Physical Inspection of Real Estate)
D. PHA-determined local standards
Details | The new standard NSPIRE has or will replace HQS and UPCS for HOME. See 24 CFR § 92.251(a) [2025].
2. Participating Jurisdictions may continue to use the old income determination rules until April 20, 2026.
True
False
Details | See 24 CFR § 92.3(c) [2025].
3. Under HOME 2025, when does the HUD Part 5 definition of annual income become mandatory for all HOME-assisted units in a project?
A. Always — every HOME project must use Part 5 for all households.
B. Whenever a PJ chooses Part 5 as its standard policy for determining income.
C. When a PJ requires or allows an owner to rely on a PBRA or TBRA program’s income determination for assisted households.
D. Only if the project receives both HOME and LIHTC funding.
Details | See 24 CFR § 92.203(d) [2025].
4. Owners of HOME projects may refuse to rent to households solely because they have a Section 8 Housing Choice Voucher.
True
False
Details | Although new HOME 2025 tenant protections were put on hold, discrimination against voucher holders is still prohibited under existing HOME rules. See 24 CFR § 92.253(d).
5. Under HOME 2025, owners and PJs must maintain records on which of the following?
A. Rents and utility allowance methods
B. Inspections and income determinations
C. Affirmative marketing and fair housing compliance
D. All of the above
Details | See 24 CFR § 92.508 [2025].
1. Under HOME 2025, owners must now give tenants 60 days’ written notice before a rent increase.
True
False
Details | HOME 2025 raised this from 30 days to 60. See 24 CFR § 92.252(e) [2025].
2. Which of the following is true about rents in HOME-assisted projects?
A. Owners must always cap rents at the HOME maximum, regardless of Section 8 rents.
B. Projects may follow project-based or tenant-based rental assistance (PBRA or TBRA) rent schedules, even if higher than HOME rents.
C. Owners can set rents at any amount with PJ approval.
D. HUD has eliminated HOME rent limits entirely.
Details | Implementing a 2008 statute, HOME 2025 allows PBRA and TBRA rents to determine the rent that should be charged for HOME families with rent assistance. See 24 CFR § 92.252(a)(2) [2025].
3. HOME 2025 allows owners to use Public Housing Authority (PHA) utility allowances for HOME-assisted units.
True
False
Details | The HOME 2013 Final Rule removed the PHA estimate UA option. It has been reinstated. See 24 CFR § 92.252(d)(1)(iii) [2025.
4. Participating Jurisdictions (PJs) and owners can amend older written agreements to adopt the new rent provisions:
A. Always, with no restrictions.
B. Only if HUD approves each amendment.
C. Yes, except for a few prohibited provisions.
D. Never; older agreements cannot be changed.
Details | Except for three provisions prohibited in §92.3(d), existing HOME agreements can be amended to apply HOME 2025 provisions. See 24 CFR § 92.3(d); HUD CPD guidance [2025].
5. The minimum affordability period for newly constructed HOME rental projects increased from 20 years to 25 years in HOME 2025.
True
False
Details | The period associated with new construction remains 20 years, but it is now a set amount, not a minimum. Any additional period will be imposed in a separate agreement between the owner and PJ. See 24 CFR § 92.252(a).
1. Disposed assets must be counted for ______ months after they are disposed of.
24
Details | Assets are counted for 2 years after they are disposed of. See 24 CFR 5.603 Net Family Assets (2)
2. Cash put into a retirement account held by a family member is now disposed of, since retirement accounts are no longer counted under HOTMA.
True
False
Details | An asset moved to a retirement account held by a member of the family is not considered an asset disposed of for less than fair market value under HOTMA guidance. See HUD Notice 2023-10 A.3.c and F.4.a
3. When a trust is set up using family assets, the assets may or may not be disposed of, depending on who the trust is set up for.
True
False
Details | An asset moved to a trust account held by a member of the family is not considered an asset disposed of for less than fair market value under HOTMA guidance. However, if it is for a person outside the family, it is an asset disposed of. See HUD Notice 2023-10 A.3.c and F.4.a
4. Which of the following uses of family assets results in the assets being disposed of?
A. Buying necessary personal property
B. Securing non-necessary personal property
C. Charitable donations
D. Using assets to pay for cosmetic surgery
Details | Using assets to buy necessary or non-necessary personal property or spending the money for personal expenses is not disposing of the assets. Giving them away, such as for charitable donations, is disposing of them. See HUD Handbook 4350.3 5-7(G)(8)
5. When an asset is disposed of, _______ is counted.
A. the actual income still earned by the asset
B. imputed asset income
Details | Because disposed asset are no longer owned by the family, the actual income cannot be counted. However, income must be imputed on disposed assets if total net assets exceed the annual asset threshold.
A. 120
B. 120, and then they can be extended with verbal verification for 120 days
C. 90
D. 90, and then they can be extended with verbal verification for 120 days
Unborn children are counted as family members and counted for income limit purposes.
True
False
The HOTMA $100,000 (as adjusted) asset limitation applies to RD multifamily housing with rental assistance.
True
False
Checking accounts are valued at a _________ balance.
A. 12-month average
B. 6-month average
C. 3-month average
D. current
RD ________ the HUD HOTMA Verification Hierarchy.
A. applies
B. does not apply
The HOTMA restriction on a resident owning a home they can live in does not apply to RD multifamily housing with rental assistance.
True
False
Click the image below for more information
A. HOTMA
B. HERA
C. NSPIRE
D. VAWA
Under HOME 2025, PHA estimates of utilities allowances can no longer be used for VASH voucher holders or project-based vouchers?
True
False
HOME 2025 safe harbor means-tested program income determination rules are less restrictive than the HOTMA regulation.
True
False
Families that are over 80% HOME limits at a LIHTC property pay ________ rent.
A. 30% of adjusted income
B. Low HOME
C. High HOME
D. LIHTC max
Under HOME 2025, for High HOME units with subsidized project-based or voucher rent, the tenants pay and the owner collects ________.
A. The full amount dictated by the subsidy program
B. No more than High HOME rent
C. No more than Low HOME rent
D. No more than HUD Fair Market Rent (FMR)
A. Subsidized and LIHTC rent provisions.
B. Utility allowance and lease-up deadline provisions.
C. Green building and tenant protection provisions.
D. Period of affordability provisions.
Details | Other than the green building and tenant protections, all HOME 2025 provisions became effective April 20, 2025. See Federal Register Notice April 17, 2025 and HERE.
Click the image below for more information
This month's quiz tests provisions that are unique to specific housing programs.
Options | Section 8 PBRA | HOME Funds | LIHTC | NHTF | Rural Development
1. Which of the above programs CURRENTLY has a planned rule that does not count unborn children as family members when selecting income limits? | Rural Development
Details | RD has verbally said that the HOTMA guidance that states the above policy will change. Current written guidance still excludes unborn children from family members when HOTMA takes effect for RD. See RD HOTMA Unnumbered Letter of 8/19/2024.
2. Which of the above programs has a minimum lease term of 6 months? | LIHTC
Details | A minimum term of 6 months meets LIHTC non-transience requirements. See 8823 Guide [2024] XVIII (A), page 193.
3. Which of the above programs does not have any student eligibility rules. | NHTF
4. Which of the above programs BY LAW requires that termination of household tenancy for almost any reason almost always be accompanied by a 30-day notice? | HOME
Details | The HOME statute enforces this provision. Other programs may have regulations and/or polices with similar provisions limited to nonpayment of rent. See 24 CFR 92.253(c).
5. Which of the above programs does not allow charging application fees? | Section 8 PBRA
Details | See HUD Handbook 4350.3 4-7(E)(2).
A. Qualified basis.
B. Eligible basis.
C. Applicable fraction.
D. Minimum set-aside.
Which of the following is not a period of time in the life of an LIHTC property?
A. Period of affordability.
B. Credit period.
C. Extended use period.
D. Compliance period.
Tax credits that come with tax-exempt bonds are _______________ credits.
A. Allocated.
B. Non-allocated.
Which of the following forms do not directly relate to the LIHTC?
A. 8823.
B. 1040.
C. 8609.
D. 8611.
A. A checking account.
B. A trust under the control of a family.
C. An RV worth $62,000.
D. An item of necessary personal property.
Add each of the items to all of the items above it. At which point would the value of the assets first start to be counted?
A. A checking account: $1,090.
B. An IRA account worth $324,567.
C. Three certificates of deposit worth $13,346.
D. An antique car held in storage worth $44,564.
Tax returns or refundable tax credits are subtracted from ___________.
A. Total gross assets.
B. The asset the return/credit was deposited into.
C. Total net assets.
D. Employment income.
Which of the following is not one of the main categories of assets?
A. Sporadic assets.
B. Necessary personal property.
C. Non-necessary personal property.
D. Real property.
Details | According to HOTMA, the three main categories of assets are 1] necessary personal property, 2] non-necessary personal property, and 3] real property. Although sporadic income is counted now, there is no such thing as sporadic assets.
A. A decrease in tax credits due to changes in tenant income.
B. Damage to a property caused by a sudden, unexpected event.
C. A loss of tenants due to relocation.
D. A decrease in property value caused by market fluctuations.
What is the immediate responsibility of the property owner when a casualty loss occurs in an LIHTC property?
A. Ensure that all repairs are completed within 30 days.
B. To inform the state housing agency promptly.
C. To reallocate tax credits to other properties.
D. To evict affected tenants until repairs are complete.
How long, maximum, does an LIHTC property owner have to restore a building after a hurricane-related casualty loss?
A. 30 days.
B. 6 months.
C. 25 months.
D. There is no specific time limit.
What could happen if the property is not restored to compliance within the allowed timeframe after a casualty loss?
A. The property owner could face eviction proceedings from tenants.
B. The property may lose its tax credits for the damaged units.
C. The tenants are required to cover the cost of repairs.
D. The IRS will automatically issue new tax credits for the property.
With the HUD CPDs announcement HERE, we know the current HOTMA implementation deadlines for all HUD and RD programs affected by HOTMA. In this quiz, we test readers' knowledge of the deadlines.
Which HOTMA deadlines below apply to the following programs?
1/01/2024 | 1/01/2025 | 7/01/2025 | 1/01/2026 | No federal deadline, monitoring agency decides
A. HUD Multifamily Housing (MFH) programs (Sec 8 PBRA, etc) | 7/01/2025
Details | See HUD Notice H-2024-09
B. HUD CPD programs (HOME, NHTF etc) | 1/01/2026
Details | See Federal Register Notice HUD 2024-31401 dated 12/31/2024
C. HUD public housing and HCV programs | 7/01/2025
Details | See HUD Notice PIH 2024-38
D. Rural Development Multifamily Housing programs | 7/01/2025
Details | See
RD MFH Stakeholder Announcement HOTMA Implementation update October 3, 2024
E. The LIHTC and bond programs | No federal deadline, monitoring agency decides
Details | See our article HERE for the 7 options states choose among.
Rural Development has now issued a second piece of guidance on how HOTMA will affect RD properties. An article on this can be found HERE. This quiz focuses on issues likely to have the biggest impact on the operation of RD affordable housing.
1. Which of the following HOTMA provisions apply to RD properties?
A. Asset limitation if net assets exceed $100,000, as adjusted.
B. Current balance used for checking.
C. Phase-in of the health and medical expense deductions.
D. Exclusion of non-necessary person property that does not exceed $50,000, as adjusted.
Details | On this list, only the asset limitation will not apply to RD programs. See RD HOTMA Unumbered letter 8/19/2024.
2. RD is adopting HOTMA's requirement to conduct an interim when adjusted household income changes by 10%.
Details | RD already has existing regulations requiring income recertification when household income changes by $100 a month or changes of $50 or more per month if the tenant requests that such a change be made. This is not changed by HOTMA. See 7 CFR 3560.152(e) and RD HOTMA Unumbered letter 8/19/2024.
3. Unborn children will not be counted when determining income limits for RD use
True or False
Details | This has no basis in HOTMA, but RD used HOTMA guidance to announce this change without further explanation. See RD HOTMA Unumbered letter 8/19/2024.
4. Which of the following portions of HOTMA at 24 CFR do not apply to RD?
A. 5.609 (a) Income inclusions
B. 5.609 (b) Income exclusions
C. 5.609 (c) Interim thresholds and other rules
D. 5.611 Adjusted income
Details | On this list only 5.609(c) will not apply. See RD HOTMA Unumbered letter 8/19/2024.
5. RD will not allow the every-three-year streamlined income verification process.
True or False
Details | RD already has existing regulations requiring income recertification and verification annually. This is not changed by HOTMA. See 7 CFR 3560.152(e).
Details | Starting with HOTMA, foster members of the household are not counted as family members when determining income limits. See Joint HOTMA Implementation Notice 2023-10 E.2.
Details | Starting with HOTMA, foster members of the household have their income excluded. See 24 CFR §5.609(b)(8) and Joint HOTMA Implementation Notice 2023-10 E.2.
Details | Joint HOTMA Implementation Notice 2023-10 E.2.
Details | See 24 CFR § 5.609(b)(4) and compare (5). Note that adoption assistance payments are limited to the dependent deduction (which was $480 at the start of HOTMA, but foster care payments are totally excluded.5. Foster children under age 13 are eligible for the childcare expenses.True or FalseDetails | Joint HOTMA Implementation Notice 2023-10 E.3.
As we move into the HOTMA era, one Agency affected by HOTMA was silent. Rural Development has now issued guidance on how HOTMA will affect RD properties. This quiz focuses on issues likely to have the biggest impact on the operation of RD affordable housing.
1. Which of the following HOTMA provisions apply to RD properties?
A. De minimis errors.
B. Income exclusions.
C. Adjusted income.
D. Asset exclusions.
Details | On this list, only the de minimis error rule will not apply to RD programs. See RD HOTMA Memorandum dated 2/29/2024.
2. RD is adopting HOTMA's requirement to conduct an interim when household income changes by 10%.
True or False
Details | RD already has existing regulations requiring income recertification when household income changes by $100 a month or changes of $50 or more per month if the tenant requests that such a change be made. This is not changed by HOTMA. See 7 CFR 3560.152(e).
3. LIHTC and HUD income determinations will not be allowable for RD use.
True or False
Details | The HOTMA provision at 24 CFR 5.609(c) allowing owner/agents to use other program income determinations, including LIHTC and HUD programs, will not be applied to RD properties. See RD HOTMA Memorandum dated 2/29/2024.
4. Which of the following portions of HOTMA at 24 CFR do not apply to RD?
A. 5.609 (a) Income inclusions
B. 5.609 (b) Income exclusions
C. 5.609 (c) Interim thresholds and other rules
D. 5.611 Adjusted income
Details | On this list only 5.609(c) will not apply. See RD HOTMA Memorandum dated 2/29/2024.
5. RD will not allow the every-three-year streamlined income verification process.
True or False
Details | RD already has existing regulations requiring income recertification and verification annually. This is not changed by HOTMA. See 7 CFR 3560.152(e).
As we move into the HOTMA era, we are focussing in this quiz on issues that are likely to have the biggest impact on the operation of affordable housing.
1. Which HOTMA provisions do NOT apply to LIHTC/HOME/NHTF properties?
A. Excluding IRS-recognized retirement accounts as assets.
B. The $50,000, as adjusted, threshold on imputed asset income.
C. Asset limits for households with more than $100,000 in assets, as adjusted, and real property suitable for occupancy.
D. ABLE Accounts excluded as assets.
Details | The asset limitations in HOTMA only apply to HUD-assisted programs. HOTMA explicitly makes it clear that HOTMA does not apply to HOME and the NHTF, and does not apply to the calculation of income that applies to the LIHTC. See HOTMA Final Rule preamble "Summary of Affected Programs" and §5.618 "Restriction on assistance to families based on assets."
2. Per HUD HOTMA guidance regarding verifications, which of the following are true:
A. Checking as valued using the current balance and with one statement.
B. Child support and alimony court-ordered amounts must be counted, even if not received.
C. Fixed income sources must be verified with benefit letters that must be no older than 120 days old at the time of receipt.
D. Excluded income and assets must be verified.
Details | All of the above are untrue, except that checking will use a current balance. See Joint HOTMA Guidance J.5.a
3. A family has access to a trust account. They are taking $500 monthly distributions from the trust. $250 is from the principal of the trust and $250 is from income. The $250 is income to the family.
True False
Details | If a family has access to a trust, the actual income from the trust is counted as it is earned, and any distributions are not counted (regardless of the makeup of the distributions). See §5.609 (b)(2)
4. Which of the following were NOT changed by HOTMA?
A. The assets disposed-of rules.
B. Imputed asset income rules.
C. Exclusion of retirement accounts
D. Student financial assistance rules.
Details | See §5.603 "Net Family Assets" (2).
5. A live-in aide's income is now counted, as is the income of foster children and adults.
True False
Details | Income of live-in aides is still excluded, and fosters' income is now also excluded. See §5.609 (b)(8)
1. Veterans' regular aid and attendance payments are excluded.
True or False
Details | See 24 CFR 5.609(b)(17)
2. A veteran receives $1,200 a month, of which $200 are deferred benefits. How much of this income is counted?
A. $1,200
B. $1,000
C. $200
D. $0
Details | Deferred VA benefits are excluded and subtracted from total benefits. See 24 CFR 5.609(b)(16)
3. A person on active duty receives $4,000 monthly total from the military. This includes $225 hazardous duty pay. A total of $3,775 is counted, which is the total payment less the excluded hazardous duty payment.
True or False
Details | Hostile fire pay is excluded, but not hazardous duty pay. See 24 CFR 5.609(b)(11)
4. Military pay stubs are called leave and earnings statements. How many pay stubs are required, minimum, to verify income?
2
Details | HOTMA requires a minimum of 2 stubs for employment. There is no reason to conclude that this does not apply to leave and earnings statements. See the Joint HOTMA Implementation Notice J.5.a
5. A person with power of attorney can likely provide needed paperwork and signatures for a person in affordable housing who is absent because they are on active duty.
True or False
Details | Securing and retaining housing are often conveyed by power of attorney.
1. Checking account balances will now be based on current balances.
True or False
Details | HOTMA Implementation Notice J.5.a
2. Workers' Compensation will always be excluded as "nonrecurring income".
True or False
Details | "Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers’ compensation, are excluded from annual income. However, periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers’ compensation continue to be included in annual income." HOTMA Implementation Notice G.6.
3. Expensive gaming systems are considered "non-necessary personal property."
True or False
Details | These would be considered "necessary personal property."
Details | HOTMA Implementation Notice Table F1
4. Those who are entitled to child support or alimony are no longer required to pursue the full court-ordered amount. Just amounts actually received are counted.
True or False
Details | HOTMA Implementation Notice F.1.
5. Verification through the Work Number and other upfront income verification databases are now the most preferred verification option.
True or False
Details |HOTMA Implementation Notice J2
States LIHTC agencies report increased utility allowance calculation issues. As misunderstanding UA rules can create severe rent noncompliance, it is crucial to understand how UAs work.
Note: Part 1 last month coveread questions 1 - 5.
6. If a building has any Rural Development-assisted units, the RD UA must be used for all other LIHTC units, even ones with HUD-assisted or voucher-holding households.
True or False
Details | See Treas. Reg 1.42-10 (b)(2).
7. If a building has any HUD-regulated units, and no units are RD-assisted, the HUD UA must be used for all other LIHTC units, except ones with voucher-holding households.
True or False
Details | If the building is HUD-regulated with no RD-assisted units, the HUD UA is used for all LIHTC units, even those with HUD tenant-based vouchers. Note: if the state LIHTC agency has determined that HOME is a HUD-regulated program, this will apply to properties with HOME, as well as Section 8 and other HUD programs. See Treas. Reg 1.42-10 (b)(3).
8. If PHA estimate UAs are used, these must be checked every _____ days to ensure compliance with the 90-day rule relating to PHA estimates.
60
Details | An owner must check at least every 60 days to ensure a change can be made timely to meet the 90-day deadline. See IRS Bulletin March 21, 2016, page 445.
9. The state agency must approve all UAs.
True or False
Details | States must be given the opportunity to review UAs, but are not under obligation to approve them. See Treas. Reg. 1.42-10 (c)(1).
10. Utility allowances that are incorrectly calculated will trigger 8823s only if the miscalculation triggers noncompliance with LIHTC gross rents.
True or False
Details | See 8823 Guide 18-9 through 11.
States LIHTC agencies report increased utility allowance calculation issues. As misunderstanding UA rules can create severe rent noncompliance, it is crucial to understand how UAs work.
1. An owner who implements a UA in January of one year and the next in November of the following year is in compliance with the LIHTC UA regulation.
True or False
Details | UAs must be reviewed and implemented at least once a calendar year, not annually (every 12 months). See Treas. Reg 1.42-10 (c)(2).
2. Multiple UA calculation methods cannot be used for different utilities and once set, they cannot be changed from one year to the next, once set at lease-up.
True or False
Details | An owner may utilize different UA methods for different utilities at a property and UA methodologies can be changed from year to year. See 8823 Guide 18-1.
3. During a lease-up, a new UA does not need to be calculated until the property has been ______% occupied for ______ days.
A. 60 and 90
B. 90 and 60
C. 90 and 90
D. 100 and 100
Details | See Treas. Reg 1.42-10 (c)(1)
4. The LIHTC UA regulation was last revised in the year __________.
A. 1990
B. 2008
C. 2016
D. 2019
Details | The LIHTC UA rules at Treas. Reg. 1-42-10 was last revised on March 4, 2019.
5. Once most types of UAs are calculated (such as HUSMS and engineer models), an owner/agent must give at least 30 days notice of the change to the tenants and the state LIHTC agency, or other notice per state or local law if longer than 30 days.
True or False
Details | Once a new UA is calculated for these UA types, the owner must submit the new UA to the state LIHTC agency and the tenants and allow a 90-day review period. The new UA can only be implemented the next rent cycle after the 90-day period. See Treas. Reg 1.42-10 (c)(1).
The Violence Against Women Act (VAWA) was reauthorized in 2022, as announced HERE. In this quiz, we explore VAWA rules, enhanced with 2023 updates.
1. During the time when VAWA was not authorized by Congress, owners/agents rightly stopped following VAWA rules.
True or False
Details | Programs funded under VAWA may not receive funding between authorizations, but the other provisions continue to apply. See more HERE.
2. VAWA prohibits police from carrying out "nuisance" penalties when victims or others repeatedly report crimes.
True or False
Details | VAWA prohibits these types of rules made by any covered governmental entity, municipal, county, or State government at a new section 41415 of the VAWA statute
3. The ________ decides how to document a victim's status as a victim of VAWA violence.
Victim of violence or Owner/agent
Details | At 34 U.S.C. § 12491 (3)(C), the victim decides how best to document their status.
4. The same financial penalties that apply to Fair Housing now also apply to VAWA noncompliance.
True or False
Details | VAWA 2022 34 U.S.C. § 12495 (5) says that "the Secretary of Housing and Urban Development and the Attorney General shall implement and enforce this subpart [VAWA Housing Provisions] consistent with, and in a manner that provides, the rights and remedies provided for in Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.). This is the official name of the Fair Housing Act.
5. An owner/agent cannot be charged penalties under Fair Housing and also be charged under VAWA for the same noncompliant action.
True or False
Details | If the same action violates both VAWA and Fair Housing (for instance because of a disparate impact effect) nothing prevents the penalties from being imposed separately under each law.
5. Which federal agency investigates VAWA complaints and levies civil penalties?
IRS General Counsel | HUD Multifamily Housing | HUD Fair Housing | The VAWA Compliance Board
Details | HUD FHEO investigates VAWA complaints and established a website in 2023 to inform the public of rights under VAWA and to take complaints HERE.
6. An owner/agent must never request verification from a third party and must always accept self-certification to document a victim's status.
True or False
Details | Only in cases of conflicting victim information, an owner agent may request 3rd-party verification to clarify the conflict. § 12491 (3)(G)
Are you up-to-date on asset rules when certifying households? If so, how about how they will change in 2024 with HOTMA? Find out with this month's quiz.
1. Under pre-HOTMA rules, once a person started taking out periodic withdrawals for a retirement account, the balance of the retirement account was the value of the asset. The withdrawals were income.
True or False
Details | According to current HUD directions for pensions and retirement funds, "if benefits are received through periodic payments, do not count any remaining amounts in the account as an asset." [HUD 4350.3 5-6 (p)] So the balance of the retirement account is NOT counted as the value of the asset.
2. HOTMA | After HOTMA takes effect, IRS-recognized retirement accounts will never be counted as assets. Once the account owner starts taking out periodic payments, these will be income.
True or False
Details | See the new 24 CFR 5.609(b)(26)
3. Under pre-HOTMA rules, imputed asset income is calculated if the total ________ value of household assets exceeds $5,000.
Market or Cash
Details | See HUD 4350.3 5-7.
4. HOTMA | After HOTMA, imputed income only applies to individual assets that cannot otherwise have income determined and only if household asset exceeds $50,000.
True or False
Details | See the new 24 CFR § 5.609 (a)(2).
5. Which of the below-listed parts of the current HUD Handbook 4350.3 provided a list of pre-HOTMA asset inclusions and exclusions?
Chapter 6 | Appendix 3 | Exhibit 5-1 | Exhibit 5-2 | Chapter 8
Details | Bonus note: the Exhibit 5-2 is for assets. In addition to the 4350.3 income list found in Exhibit 5-1, a more up-to-date list has been published by HUD. It appears that most of the new "exclusions" listed in this document will still apply post-HOTMA as part of the new 24 CFR § 5.609 (b)(22). See HERE for more information.
6. HOTMA | HOTMA adds several new asset types.
True or False
Details | HOTMA eliminates the list of inclusions, in favor of an extensively re-tooled list of exclusions. If it is not on the list of exclusions, it must be counted. This applies to both assets and periodic income.
Are you savvy with the new NSPIRE Standards? Find out in this quiz here! Each of the below represents a change from UPCS or a clarification in the release of the new Standards.
For more info on the new standard (and the reason for all of the answers) see HERE.
1. The new standard has increased the severity level of graffiti compared to UPCS.
True or False
Details | The Graffiti Standard has been removed. Graffiti does not have a clear health and safety risk and HUD has reviewed this Standard and believes that it is unnecessary and therefore is removing it from the NSPIRE Standards.
2. For the “Leak” deficiency in the “Electrical – Conductor” Standard, only active leaks are to be cited (not just evidence of past leaks) and leaks near a component confirmed to be waterproof will not be cited.
True or False
Details | This prevents reporting of past issues that have been fixed already but that are still evident.
3. Deficiency criteria for the egress Standard have been changed by requiring bedroom window egress for all units in the building, and living room windows are now considered egress for the purposes of this Standard unless there is a fire escape present.
True or False
Details | Deficiency criteria for the egress Standard have been changed by requiring bedroom window egress only for units in the building’s 3rd level and below, and living room windows are not considered egress for the purposes of this Standard unless there is a fire escape present.
4. The installation of guardrails will be required where these are missing above elevated surfaces to protect from fall hazards along balconies, stairs, ramps, decks, rooftops, hallways, retaining walls, and other walking surfaces.
True or False
Details | HUD believes that guardrails are essential to resident safety. Guardrails are commonly required in local codes. Therefore, for many localities, this will not be a new requirement, and therefore this is not expected to create a significant burden.
5. Pests other than rats, mice, cockroaches, and bed bugs are not reported under NSPIRE.
True or False
Details | Additional pest species not listed in the Standard, including ants, spiders, fleas, raccoons, squirrels, and snakes, or any pest with potential impacts on resident health and safety, would constitute evidence of an infestation and therefore be counted as a deficiency. The presence of rats, mice, cockroaches, and bed bugs specifically are each identified as separate deficiencies because they are common forms of infestation that present certain health risks and challenges that HUD wishes to identify specifically. This is not intended to be a complete list of pests, and additional pests are noted in the “other pests” Deficiency of the Infestation Standard.
Have you heard about HOTMA? It is huge news for the affordable housing industry. This quiz will explore an additional half a dozen possible common myths that have already started growing about what HOTMA actually says. Check out last month's quiz for the first six.
Are the below true or false?
1. For HOME and public housing, the Earned Income Disregard will be applied to households who qualify for the first time until 2026.
TRUE or FALSE
Details | The EID applies to HOME and Public Housing programs and involves a 24-month period where new earned income is phased in. The EID will be applied for persons who qualify for the first time before 01/01/2024. After that, no new people will be added, but the 24 months will run out for those who qualified up to 01/01/2024. Thus, the EID will disappear for all no later than 01/01/2026. See 24 CFR 5.617(c) and 960.255(b) [2024]
2. Retirement accounts will no longer ever be counted as assets. They will be counted as periodic income once periodic withdrawals start to be made.
TRUE or FALSE
Details | See 24 CFR 5.609(b)(26) [2024]
3. Interim adjustments for income-based HUD rent will not need to be conducted if the adjustment occurs 3 months or less before the household's annual certification date.
TRUE or FALSE
Details | See 24 CFR 5.657(c)(3)(ii) [2024]
4. Interms will be necessary for HUD income-based rent when a household's gross annual income changes by 10% or more.
TRUE or FALSE
Details | It is 10% of the household's ADJUSTED, not gross income that will trigger the interim. Reference: See 24 CFR 5.657 [2024]
5. If a HOME or NHTF project has a household with tenant-based federal or state rental subsidies, the owner and PJ must accept the TBRA determination of household income for HOME or NHTF purposes.
TRUE or FALSE
Details | While this is true for project-based subsidy for HOME and NHTF, and also required for NHTF units, it is an OPTION for HOME PJs, not required. See 24 CFR 92.252 [2024]
Have you heard about HOTMA? It is huge news for the affordable housing industry. This quiz will explore half a dozen possible common myths that have already started growing about what HOTMA actually says. Are the below true or false?
1. The dependent deduction when calculating adjusted income will be $525 starting in 2024.
TRUE or FALSE
Details | The amount will remain $480 when HOTMA takes effect, but will then be adjusted for inflation annually thereafter. The elderly household deduction is the one that will start at $525 in 2024. 24 CFR § 5.611 (a)(1)
2. HOTMA does not require owners to deny occupancy to households with assets that exceed $100,000.
TRUE or FALSE
Details | The asset limitation is an option that HOTMA allows owners, but not a requirement. 24 CFR § 5.618 (c)(2)
3. Foster children and adults will no longer qualify to live in HUD housing.
TRUE or FALSE
Details | Fosters will continue to be allowed to reside in HUD units and count for occupancy standards. They will no longer be counted for income limit purposes and their income will be excluded. 24 CFR § 5.609 (b)(8)
4. Because it relates to adjusted income, the new dependent deduction will never affect income determinations for HOME, NHTF, or LIHTC properties.
TRUE or FALSE
Details | HOME may require adjusted income for over-income households (this will not change with HOTMA). HOME, LIHTC, and NHTF will all use the dependent deduction, which will limit earned income counted for adult dependent full-time students and adoption assistance payments. 24 CFR § 5.609(b)(14)) and (§ 5.609(b)(15))
5. LIHTC income determinations of gross household income may now be used for calculating income and rent for HUD programs.
TRUE or FALSE
Details | LIHTC income determinations may be used by HUD programs to determine gross income, along with SNAP, SSI, and other means-tested programs. 24 CFR § 5.609(c)(3)(E)
6. If a HOME or NHTF project has project-based federal or state rental subsidies, the owner and PJ must accept the PBRA determination of household income for HOME or NHTF purposes.
TRUE or FALSE
Details | HOTMA now includes this provision in the HOME and NHTF regulations. HOME | 24 CFR § 92.203(a)(1)
NHTF | 24 CFR § 93.151(a)(1) through (3)
90 days | 120 days | 2 months | 6 months | 180 days
Choose from the above options for questions 6 - 8.
[Note: questions 1-5 were in Part 1 of this series in last month's quiz]
6. According to the 8823 Guide, LIHTC verifications are good for 120 days from when they are received.
Details | See 8823 Guide 4-21, 4350.3 5-16 B.
Note: several state HFA agencies consider this to be obsolete based on the updated HUD "120-day by receipts + 120-day after receipt" policy (for references, see Part 1 of this quiz).
7. Source document verifications for HOME are good for a cert that is no more than 6 months old.
Details | See HOME Guide 3.2 D 3 & E 3 & 5; 24 CFR 92.203 (2013). Determinations of income for HOME are only good for 6 months prior to them being effective.
8. Verifications at Rural Development properties with LIHTC funding are good for 120 days with verbal clarification.
Details | Contrast 8823 Guide 4-21, 4350.3 5-16 B with HB-2-3560 6.8
Note: this assumes that the 120-day limit found in the 8823 Guide is required by the state LIHTC Agency. If HUD's "120-day by receipts + 120-day after receipt" policy is allowed, this answer could be different and RD verifications may expire at 180 days before the LIHTC ones up to 240 days.
9. For most affordable housing programs, third-party verification is limited to forms completed by the third party that come directly to the owner/agent and do not go through the applicants'/residents' hands.
TRUE or FALSE
Details | See HOME Guide 3.2 D 3 & E 3 & 5; 24 CFR 92.203 (2013), HUD 4350.3 5-13 (B), Tres.Reg. 1.42-5, and IRS LIHC Newsletter #54.
Note: HOME has always considered the primary method of verification to be "source documents", which are documents prepared by a third party, regardless of whether these are delivered by the applicant/tenant or directly from the third party. A prominent example is paystubs. In 2013, HUD multifamily adopted a similar policy under Change 4 of the HUD Handbook 4350.3. These also meet the requirements of the Treasury regulations and the IRS considers HUD's definitions to be sufficient if the state HFA concurs.
10. HUD and the IRS now consider paystubs to be third-party verifications.
TRUE or FALSE
Details | See details in the above item.
90 days | 120 days | 2 months | 6 months | 180 days
Choose from the above options for these questions.
1. HOME does not require VOE (Verification Of Employment) forms, but does require 2 months of wage history for employed persons in HOME units.
Details | See HOME Guide 3.2 D 3 & E 3 & 5; 24 CFR 92.203 (2013) |NHTF 24 CFR 93.151 (d) and 93.302 (e)
2. Except for fixed income sources, verifications for HUD multifamily programs must be no older than 120 days when they are received.
Details | See 4350.3 5-13 A, 5-16 B, Appendix 3, HUD MF Notice H-2016-09
3. Except for fixed income sources, verifications for HUD multifamily must be used for a certification that is effective no more than 120 days from receipt of the verifications.
Details | See 4350.3 5-13 A, 5-16 B, Appendix 3, HUD MF Notice H-2016-09
4. Rural Development verifications are generally good for 90 days from receipt.
Details | See HB-2-3560 6.8 & 11
5. With verbal confirmation, Rural Development Verifications may be good for 180 days.
Details | See HB-2-3560 6.8 & 11
Next month: Verifications | Part 2
As we move into a new year, we may find ourselves thinking of timelines, which may lead to thoughts of lease terms, which this quiz explores.
1. Which program has a minimum lease term that is less than 12 months? (select all that apply)
A) HUD Section 8
B) Rural Development
C) LIHTC
D) HOME
E) NHTF
Details | The LIHTC program has a 6-month minimum lease term requirement for most tax credit projects. All of the others generally have a minimum 12-month lease term. See § 42(i)(3)(B)(i) & The General Explanation of the Tax Reform Act of 1986 (the “Blue Book”); 8823 Guide chapter 20; § 42 (i)(3)(B)(iv).
2. Which programs have a federally-required model lease?
A) HUD Section 8
B) Rural Development
C) LIHTC
D) HOME
E) NHTF
Details | HUD Multifamily programs (including Section 8) have a model lease. The rest do not.
3. True or False
HOME and the HTF require that all lease terminations be given with 30 days' notice.
Details | This is a HOME requirement, but the NHTF requires that notice be given in a timeframe dictated by local law. See (HOME) CFR 92.253 (b) (2013) (HTF) 24 CFR 93.303 (a) - (c)
4. True or False
Rural Development leases are developed by an owner and approved by RD, but they must be certified by the owner's attorney to be in compliance with RD rules and local and state law.
Details | See HB-2-3560 Attachment 6-E & 6-F
5. True or False
The LIHTC program has a list of 9 lease provisions that are prohibited by law.
Details | The LIHTC program requires non-transience (generally requiring a minimum term of at least 6 months) but does not have prohibited lease provisions. This separates it from other programs that do not provide model leases, including the Rural Development, HOME, and NHTF programs.
1. Which agency will not provide rental assistance for zero-income households who do not at least have exempt income.
HUD | Rural Development
Details | HUD allows zero-income households, but “it is recommended that owners have a policy to re-verify the status of tenants reporting zero income at least quarterly.” See HUD 4350.3 9-11 (D)(1)(a)
“It is the policy of Rural Development not to accept a tenant certification for an applicant or tenant with zero income unless all income is specifically exempted.” See HB-2-3560 6.9 (A)(4).
2. The IRS does not allow zero-income households to qualify tax credit units.
True or False
Details | The IRS does not specifically forbid zero income households, however, “if the household reports little or zero income, or sporadic income, owners may use estimates based on actual income earned or received during the twelve-month period immediately preceding the certification. Owners should use due diligence by asking follow-up questions when the income certification process reveals unusual circumstances suggesting additional sources of income.” See 8823 Guide 4-33. The IRS LIHC Newsletter #15 (May 2005) provides further due diligence measures that owners can take to deal with households that represent that they have zero income.
NOTE: the answers to questions 1 - 5 were found in Part 1, below.
Are the following allowable deductions when determining adjusted income for programs that use HUD's adjusted income rules to calculate rent, like HUD, RD, and over-income HOME units?
6. $960 in dependent deductions for two dependent children (ages 15 and 16) in a household.
Yes
Details | $480 is allowed for each dependent. See HUD 4350.3 5-10 (A)(1).
7. $480 dependent deduction for a foster child.
No
Details | Foster children are not eligible for dependent deductions. See HUD 4350.3 5-10 (A)(1).
8. $800 in elderly deductions for a household with two members over age 62.
No
Details | Only $400 is allowed as an elderly household deduction for an entire household. See HUD 4350.3 5-10 (E).
9. Childcare for a 9-year-old foster child that allows a foster mother to work.
Yes
Details | Foster children are eligible for childcare deductions. See HUD 4350.3 5-10 (B)(1).
10. Childcare that a father pays for his son that lives with his mother.
No
Details | Childcare must be for children in a household. See HUD 4350.3 5-10 (B)(3).
Are the following allowable deductions when determining adjusted income for programs that use HUD's adjusted income rules to calculate rent, like HUD, RD, and over-income HOME units?
1. Childcare for a 13-year-old child that allows his mother to go to school.
No.
Details | Childcare is only deductible for children age 12 and under. See HUD 4350.3 5-10 (B)(1).
2. Medical expense for cosmetic surgery.
No.
Details | Costs for cosmetic surgery are not allowed expenses. See HUD 4350.3 Exhibit 5-3 page 2.
3. Childcare for a 16-year-old child with disabilities that allows her mother to work.
Yes.
Details | This is an allowable disability assistance expense. See HUD 4350.3 5-10 (C)(1).
4. Medical expense for complications arising from cosmetic surgery.
Yes.
Details | Costs from cosmetic surgery complication is an allowed expense. See HUD 4350.3 Exhibit 5-3 page 2.
5. Child care that allows a father to take time for recreation every week.
No.
Details | Child care must allow an adult to work, looks for work, or attend school. See HUD 4350.3 5-10 (B)(1)(a).
1. To ensure consistency, when a resident or applicant requests a reasonable accommodation, verification of the requester's disability must always be obtained.
True or False
Details | Disabilities that are obvious or otherwise know to an owner/agent are not required to be verified. See Joint Statement of HUD and the DOJ on Reasonable Accommodations Under the Fair Housing Act, question 17.
2. How does a property owned by an entity whose legal name contains a religious reference (for example St. Joseph's Catholic Housing) avoid discrimination when advertising?
Details | By ensuring that all advertising is accompanied by a disclaimer that the housing is open to all without discrimination. See FHEO Guidance Regarding Advertisements under Section 804(c) of the Fair Housing Act, Jan. 9, 1995, page 1.
3. Affordable housing federal income limits do not apply to a person with a disability if they make a reasonable accommodation request to the limits.
True or False
Details | Reasonable accommodation "is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces." See Joint Statement of HUD and the DOJ on Reasonable Accommodations Under the Fair Housing Act, question 6). Income limits and other provisions to meet federal law are generally not subject to accommodation.
5. The National HTF and HOME are both monitored by HUD-CPD
True or False
6. The National HTF requires source documentation every year, unlike HOME, which allows self-certification other years than each sixth year of the affordability period.
True or False
Details | The HTF allows for self-cert except for every sixth year, the same as HOME. See 24 CFR 93.151 (d) and 93.302 (e).
7. If tenancy is terminated for good cause, a 30-day notice must always be given for National HTF units, like HOME. Also like HOME, the only exception is when an eviction is because of an imminent physically dangerous situation.
True or False
Details | National HTF termination of tenancy simply must be for cause and in a timeframe "dictated by local law." HOME's 30-day requirements do not apply. See 24 CFR 93.303 (a)-(c)
8. Over-income National HTF units are handled similarly to HOME, depending on if the project has fixed or floating HTF units, except the HTF does not charge rent based on adjusted income.
True or False
Details | See 24 CFR 93.302 (f)
9. It is safe to assume that state HTF units follow National HTF rules.
True or False
Details | State HTF rules are determined by each state. As many State HTFs existed before the National HTF, states often apply rules more similar to HOME for their HTFs than the National HTF. It is not safe to assume which rules apply for a State HTF, and an owner/agent needs to check with their state HTF agency. Also, the State HFA agency may be the National HTF grantee in the state, the tax credit allocator, the state HOME PJ, or another agency. Make no assumptions!
We recently updated our Multiple-Programs Guide and training courses to include provisions for the National Housing Trust Fund (HTF). The National HTF shares many provisions with HOME, but also has some key differences. This quiz explores these.
1. The National HTF has low and high HTF units, similar to low and high HOME.
True or False
Details | The National HTF only has one set of income and rent limits, based on HUD's extremely-low income (ELI) limits. See 24 CFR 93.302 (a)&(b).
2. National HTF units are fixed or floating, like HOME.
True or False
Details | See 24 CFR 93.302 (f).
3. Like HOME, the National HTF carries an affordability period that is most often 20 years.
True or False
Details | The National HTF affordability period is 30 years. See 24 CFR 93.302 (d)(1).
4. National HTF lease terms are generally for 12 months, as are HOME leases.
True or False
Details | See 24 CFR 93.303 (a)-(c).
Match the letters to the numbers that apply (more than one letter may apply).
1. Applicable Fraction
a) is calculated for a building
b) involves unit size
2. Minimum set-aside
c) is calculated for a project
d) does not involve unit size
e) is an irrevocable election
3. True or False
The Average Income Test allows for a New York City 25-60 option
Details | See IRC Sec. 42 (g)(1)(C)(I)
4. True or False
The applicable fraction for a building can be found on IRS form 8609.
Details | The eligible basis (line 7) and the qualified basis (line 8a) are found on the form but the applicable fraction is not. It can be algebraically calculated using the above lines, however.
1. Which agency will not provide rental assistance for zero income households who do not at least have exempt income.
HUD or Rural Development
Details | HUD allows zero-income households, but “it is recommended that owners have a policy to re-verify the status of tenants reporting zero income at least quarterly.” See HUD 4350.3 9-11 (D)(1)(a)
“It is the policy of Rural Development not to accept a tenant certification for an applicant or tenant with zero income unless all income is specifically exempted.” See HB-2-3560 6.9 (A)(4).
2. The IRS does not allow zero income households to qualify tax credit units?
True or False
Details | The IRS does not specifically forbid zero income households, however, “if the household reports little or zero income, or sporadic income, owners may use estimates based on actual income earned or received during the twelve-month period immediately preceding the certification. Owners should use due diligence by asking follow-up questions when the income certification process reveals unusual circumstances suggesting additional sources of income.” See 8823 Guide 4-33. The IRS LIHC Newsletter #15 (May 2005) provides further due diligence measures that owners can take to deal with households that represent that they have zero income.
Details | A unit of any size is counted as one unit toward the percentage of total units needed to meet a project's minimum set-aside. Square footage only is a factor when calculating a building's applicable fraction.
Details | The 50 in 20-50 indicates the highest income limit that ANY unit at the project can have and retain its status as a tax credit unit.
Details | New average versions of the 25-60 and 40-60 minimum set-asides were enacted with the new law. The 20-50 rule does not have an average version.
Details | Starting with the Housing and Economic Recovery Act (HERA) in 2008, tax credit income limits hold harmless. That is, once a project places in service, the income limits used will never go below the limits used in a prior year.
Details | HUD describes the tax program limits as Multifamily Tax Subsidy Program limits.
Details | HOME limits are different than other HUD program (AMI) or the tax credit limits. They are generally published months later and are implemented then.
Details | HERA Special limits are available to projects with at least one building placed in service in 2008 or earlier. A 2009 project does not qualify.
Details | Tax credit deals that are 4% "federally subsidized" are not eligible for the rural limits. HERA defined "federally subsidized" as tax-exempt bonds.
Details | Areas defined by USDA as eligible for RD assistance are eligible for the rural rent option.
Details | Term life is excluded as an asset. See 4350.3 Exhibit 5-2 (A)(7).
Details | While term life cannot be cashed in and is not an asset to a person while they are alive, once life insurance is paid, the lump sum amount received by a beneficiary is considered an asset. See 4350.3 5-6 Q.
Details | Owner / agents are to count "all regular pay, special pay, and allowances of a member of the Armed Forces, except...the special pay to a family member serving in the Armed Forces who is exposed to hostile fire (e.g., in the past, special pay included Operation Desert Storm)" Hazardous duty pay is not hostile fire pay, and is therefore included.
HUD Handbook 4350.3 Exhibit 5-1. (compare "Inclusions" (8) and "Exclusions" (7)).
Details | Persons in the military receive a Leave and Earnings Statement (LES). These statements act essentially as pay stubs and provide income information for all military pay and allowances received.
Details | Normally "if the spouse or a dependent of the person on active military duty resides in the unit, that person’s income must be counted in full, even if the military member is not the head, or spouse of the head of the family." However this section of the handbook goes on to clarify that "Owners are encouraged to be as lenient as responsibly possible to support affected households in situations where persons are called to active duty in the Armed Forces." This includes allowing "a tenant living in an assisted unit to provide care for any dependents of persons called to active duty in the Armed Forces on a temporary basis, as long as the head and/or co-head of household continues to serve in active duty. Income of the child (e.g., SSI benefits, military benefits) is not counted as income of the person providing the care." In the described case, the children and absent parent would likely to be considered part of a temporary arrangement and not household members whose income must be counted.4350.3 5-6 (B)(3)(a) & (C) (2). The IRS endorses the same approach for tax credit properties in the 8823 Guide, Chapter 4.
Details | See 4350.3 3-13 (A)(2)(d).
Details | Unlike the HUD rule, the tax credit/bond student rule does not make any exception specifically because someone is a veteran.
1. To ensure consistency, when a resident or applicant requests a reasonable accommodation, verification of the requester's disability must always be obtained.
True or False
Details | Disabilities that are obvious or otherwise know to an owner/agent are not required. See Joint Statement of HUD and the DOJ on Reasonable Accommodations Under the Fair Housing Act, question 17.
2. How does a property owned by an entity whose legal name contains a religious reference (for example, St. Martin Lutheran Housing) avoid discrimination when advertising?
Details | By ensuring that all advertising is accompanied by a disclaimer that the housing is open to all without discrimination. See FHEO Guidance Regarding Advertisements under Section 804(c) of the Fair Housing Act, Jan. 9, 1995, page 1.
3. Affordable housing federal income limits apply to a disabled person even if they make a reasonable accommodation request to the limits.
True or False
Details | Reasonable accommodation "is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces." (Joint Statement of HUD and the DOJ on Reasonable Accommodations Under the Fair Housing Act, question 6).
Income limits and other provisions based on federal law, are not subject to accommodation.
Details | The tax credit program uses the Section 8 program rules to determine household income calculations. The IRS refers to the 4350.3 as the HUD authority to be used. See IRS Notice 88-80 and the 8823 Guide 1-2.
Details | The 4350.3 is the official guidebook to the Section 8 multi-family program.
Details | When a PJ selects to define income based on HUD "Part 5" income, the guidance provided in the HUD handbook is useful. It also provides the most thorough explanation of the HUD student regulations adopted by the HOME regulation in 2013.
Details | Although the handbook HB-2-3560 is the official 515 handbook, the RD program uses the Section 8 regulation to determine household annual and adjusted income calculations. As the 4350.3 is HUD's most thorough explanation of the HUD regulation, it provides details that are not included in the HB-2-3560. See 7 CFR 3560.153 and 24 CFR 5.609 and 611.
Details | Starting with Change 4 of the HUD Handbook, foster members of the household are counted as household members when determining income limits. See HUD 4350.3 3-6 (E)(3).
Details | Starting with Change 3 of the HUD Handbook, foster members of the household have their income counted as other household members. All unearned income is counted for minors. See 4350.3 Figure 5-2 and 24 CFR 5.609.
Details | See references for questions 1 and 2 above, but contrast HUD 4350.3 5-10 (A)(1)
Details | See 4350.3 5-6 (A)(3)(g) and Exhibit 5-1, Exclusions, (2). Compare Exhibit 5-1, Exclusions, (12) and note that adoption assistance payments are limited to $480 per adopted child, while foster payments are entirely excluded.
1. We are not ever allowed to subtract amounts off of periodic payment sources to use net income when calculating gross annual income for a household.
True or False.
Details | There are times when we take off certain amounts before calculating gross annual income for households.
2. If the above is False, create a list of exceptions.
NOTE: this does not represent all excluded income (per HUD 4350.3 Exhibit 5-1), but rather times when we commonly must calculate a lower amount from available information.
1. Self-employment: "When calculating annual income, owners must include the net income from operation of a business or profession including self-employment income. Net income is gross income less business expenses, interest on loans, and depreciation computed on a straight-line basis." HUD 4350.3 5-6 H
2. Benefit adjusted for prior overpayment: "If an agency is reducing a family's benefits to adjust for a prior overpayment (e.g.,social security, SSI, TANF, or unemployment benefits), count the amount that is actually provided after the adjustment." HUD 4350.3 5-6 J
[calculation: gross social security less adjustment for prior overpayment]
3. Social Security delayed benefits: Excluded as income are the parts of payments that represent "deferred periodic amounts from supplemental security income and social security benefits that are received in a lump-sum amount or in prospective monthly amounts." HUD 4350.3 Exhibit 5-1 Income Exclusions(13).
[calculation: gross social security less amounts for delayed benefits]
4. State, local government, social security or private pensions paid to
a former spouse:
"Other state, local government, social security or private pension funds paid directly to an applicant’s/tenant’s former spouse pursuant to the terms of a court decree of divorce, annulment, or legal separation are
also not counted as annual income." HUD 4350.3 5-6 L 5[calculation: gross social security less amounts ordered to former spouse]
5. VA deferred benefits for section 8 residents: "For Section 8 tenants only, any deferred Department of Veterans Affairs (VA) disability benefits that are received in a lump sum or in prospective monthly amounts are excluded from annual income." HUD 4350.3 5-6 Q 3
[calculation: gross VA benefit less amounts for delayed benefits]
6. Earned income for adult dependent full-time students: Income is excluded that is for "earnings in excess of $480 for each full-time student 18 years or older (excluding the head of household and spouse)." HUD 4350.3 Exhibit 5-1 Income Exclusions(11)
[calculation: gross earned income less everything but $480]
7. Adoption assistance payments: "Adoption assistance payments in excess of $480 per adopted child" are excluded." HUD 4350.3 Exhibit 5-1 Income Exclusions(12)
[calculation: gross adoption assistance payments less everything but $480]
8. Military hostile fire pay: Income exclusions include "the special pay to a family member serving in the Armed Forces who is exposed to hostile fire."HUD 4350.3 Exhibit 5-1 Income Exclusions(7).
[calculation: ALL military pay and allowances, less hostile fire pay]
Details | The HOME statute, SEC. 225, under the heading TERMINATION OF TENANCY, says “an owner shall not terminate the tenancy or refuse to renew the lease of a tenant of rental housing assisted under this title except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause. Any termination or refusal to renew must be preceded by not less than 30 days by the owner's service upon the tenant of a written notice specifying the grounds for the action.”
Details | Appropriations bills since 2014, most recently 2016's HR 2029, SEC. 235. (amending HOME statute Subsection (b) of section 225), have included an exception. It says that the "30-day waiting period is not required if the grounds for the termination or refusal to renew involve a direct threat to the safety of the tenants or employees of the housing, or an imminent and serious threat to the property (and the termination or refusal to renew is in accordance with the requirements of State or local law)."
Details | HTF regulation § 93.303 (c) says a owners must provide a "specific period for vacating that is consistent with State or local law."
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